Orilon's rubber carbon black business sales increased in the second quarter, but profits fell due to rising costs

　　Orilon's rubber carbon black business sales increased in the second quarter, but profits fell due to rising costs

　　A recent report released by the American company Orilon shows that in the second quarter as of June 30, its rubber carbon black business unit achieved significant growth in sales, reaching US$311 million (equivalent to approximately RMB 2.25 billion), compared with last year It increased by $2.2 million during the same period. However, despite the increase in sales, the division's adjusted earnings (EBITDA) fell 18% year-on-year to US$47 million (equivalent to approximately RMB 340 million).

　　This decline in revenue is mainly attributed to the weakening demand for rubber carbon black in the Americas and Asia, which resulted in a year-on-year decrease of 3,500 tons in output in the second quarter, a decrease of 2.0%. Orilon pointed out that the increase in fixed costs is also one of the important factors affecting earnings.

　　Looking back at the entire first half of the year, Orilon's rubber carbon black production achieved a slight increase, a year-on-year increase of 1,100 tons, an increase of 0.3%, and the total output reached 355,000 tons. However, sales failed to grow simultaneously, and instead fell by US$4.5 million year-on-year, a decrease of 0.7%, with total sales of US$643.5 million (equivalent to approximately RMB 4.46 billion).

　　In the first half of the year, the division's adjusted earnings also suffered a decline, with a year-on-year decrease of US$16.7 million, a decrease of 13.8%, and final income of US$104.5 million (equivalent to approximately RMB 757 million). The result was mainly hit by a double whammy of higher fixed costs and lower sales in the Americas, although higher production in Europe and better contract pricing alleviated some of the pressure.

　　In the face of weak global demand and uncertainty about macro trends, Corning Painter, CEO of Orilon, said that despite the challenging external environment, the profitability of the rubber industry has remained relatively stable. He stressed that the company will continue to work hard to respond to market changes and maintain steady business development.

　　Meanwhile, group chief financial officer Jeff Grajic also pointed out that the company witnessed "unusually high cogeneration earnings" last year, which gave this year's performance comparison a high base. Despite this, Orilon remains optimistic about the future and expects that as plant utilization improves in the second half of 2024, it will offset the continued weakness in the rubber market by improving profitability.